ISTANBUL
Greece’s plan to become one of Europe’s main liquefied natural gas (LNG) hubs and expand its LNG capacities is being undermined by falling demand and low prices for Russian gas, experts say.
Athens is one of several EU countries aspiring to become a major natural gas supplier to Europe, Ana Maria Jaller-Makarewicz, energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said in an interview with Anadolu.
“But (Greece) is faced with the reality that there is no demand for its re-exports,” said Jaller-Makarewicz.
It cited data from the EU statistics office Eurostat, according to which Greek gas consumption increased by 31 percent from January to May compared to the same period last year, but the country’s gas exports fell.
“This is due to Bulgaria increasing its gas imports from Turkey, which caused Greece to reduce its LNG imports by 38% year-on-year in the first half of 2024,” Jaller-Makarewicz explained.
According to Greek gas network operator Desfa, the number of LNG tankers arriving at the Revithoussa terminal has more than halved this year: only 12 ships docked, compared to 26 in the same period last year.
The Revithoussa terminal, Greece’s only LNG terminal, has a capacity of 7 billion cubic metres (bcm) per year, exceeding the country’s gas consumption of 4.7 bcm in 2023 by 50%.
Jaller-Makarewicz explained that the terminal’s average capacity utilization this year was 24%, which is enough to meet domestic demand while still having free capacity for exports to neighboring countries.
Regarding the development of new LNG terminals, Costis Stambolis, executive director of the Athens-based Institute of Energy for Southeast Europe (IENE), said that not all planned terminals would be built, although they had the necessary permits and had gone through the regulatory process.
As part of the country’s plans to develop five LNG terminals with a total capacity of around 25 billion cubic metres, Athens’ first floating storage and regasification unit (FSRU), the Alexandroupolis, is currently undergoing testing and is expected to begin commercial operations between September and October, Stambolis noted.
Jaller-Makarewicz also said that the commissioning of the Alexandroupolis FSRU, with a capacity of 5.5 billion cubic metres per year, had been delayed from mid-June to around October this year.
Stambolis noted that while LNG imports have declined compared to a year or two ago, companies remain keen to maintain and expand their infrastructure for future growth, depending on global conditions and prices.
However, Stambolis mentioned that the final investment decision for other FSRU units in the country remains uncertain in the coming months. He believes they will be delayed and some will even be cancelled.
He attributed the project delays to the “unrealistic” expectations of having multiple FSRU terminals in operation. In addition, he explained that Greece wants to expand its LNG terminals not only to meet domestic needs but also to serve the South-Eastern European market.
“Now that Russian gas is so cheap, there is a lack of interest,” he said, noting that this was “temporary.”
Companies are returning to Russian gas due to prices
Stambolis referred to the 2027 deadline by which the EU aims to become independent of Russian gas imports, saying this will be a challenge due to low prices.
“Currently, Russian gas is much cheaper than LNG in Europe and many companies are turning back to Russian gas because of the price,” he explained.
He also added that in recent months more than half of Greece’s gas imports have come from Russia, which is a contrast to the situation just 18 months ago.
“So we have a cost problem. That’s a big challenge,” he explained.
According to Jaller-Makarewicz, although gas demand in the EU was expected to recover slightly this year, the opposite has happened: Europe’s LNG imports “continue to decline”.
She explained that Europe’s LNG imports, which include those from the EU, the UK, Norway and Turkey, fell 20% year-on-year to 72.6 billion cubic metres, while EU imports fell 11% year-on-year to 60.1 billion cubic metres in the first half of the year alone.
“Demand for gas and LNG is expected to continue to decline in the coming years, raising the question of whether or not new LNG terminals are needed,” she added.
“A boom in global LNG production and in Russian natural gas to be exported to Europe could lead to a decline in European gas demand in the near future,” said Jaller-Makarewicz.
Türkiye and Greece can strengthen Europe’s energy security
Stambolis stressed that Greece’s investment in LNG infrastructure makes strategic sense given the International Energy Agency’s forecast that LNG capacities will increase and prices are expected to fall after 2025.
However, Greek Environment and Energy Minister Theodoros Skylakakis expressed doubts about the planned floating LNG storage facility in the Pagasetic Gulf in a speech to parliament, citing economic and political challenges as reasons for the possible setback, Greek daily Kathimerini reported last month.
“Greece has covered – and more than covered – its liquefied natural gas needs through the Revithoussa and Alexandroupolis stations,” Skylakakis explained.
Stambolis contradicted the Greek minister, claiming that Greece needs more LNG capacity to serve the regional market. He believes that five FSRU terminals are “a lot,” but says two or three are necessary.
Regarding the Greek minister’s comments, Jaller-Makarewicz said it was still “uncertain” whether further projects would be pushed forward.
“These additional terminals were planned to supply gas to Greece, as well as Bulgaria, Romania, Hungary, Slovakia, Moldova and Ukraine,” she added.
Despite setbacks in Greece’s pursuit of a key role in the liquefied natural gas sector, particularly in southern Europe, Stambolis is convinced that strengthening energy security is not only a national but also a crucial regional priority.
He added that Turkey, in cooperation with Greece, could improve energy security in Southeast Europe and the rest of the continent.
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